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Using the following information, answer the questions below. MoonStar expects its sales increase by 9% for 2020. Depreciation expense, Interest expense and dividend payout amount will remain constant; the tax rate will also remain constant. Cost of goods sold, current assets, and accounts payable increase with sales, the firm is operating at its 75% capacity and no new debt or equity is issued.

MoonStar, Inc.

Income Statement ($ in millions)

2019 2020

Net sales	$1,000.0
Less: Cost of goods sold	$350.0
Less: Depreciation expense	$120.0
Less: Other expenses	$90.0
Earnings before interest and taxes	$440.0
Less: Interest paid	$100.0
Taxable Income	$340.0
Less: Taxes (40%)	$136.0
Net income	$204.0
Dividends	$28.8
Additions to Retained Earnings	$175.2

MoonStar, Inc.

2018 and 2019 Balance Sheets ($ in millions)

	2019	2020		2019	2020
Cash	50.0		Accounts payable	137.8
Accounts rec.	245.0		Notes payable	55.0
Inventory	315.0		Total	192.8
Total	610.0		Long-term debt	767.0
Net fixed assets	1300.0		Common stock	665.0
			Retained earnings	285.2
Total assets	1910.0		Total liab.& equity	1910.0

(A) Calculate the firms full capacity sales.

(B) Calculate External Financing Needed (EFN) using forecasted income statements and balance sheet (You may copy income statement and balance sheet to the answer space below and estimate the numbers for 2020) .